Continuing its methodical expansion into the software space, storage giant EMC ( EMC) will acquire Captiva Software ( CPTV) for $22.25 a share, or $275 million, net the smaller company's cash. The price represents a premium of 18% over Captiva's latest closing price of $18.30 a share, the companies announced after the market closed Thursday. Shares of Captiva quickly soared $3.69, or 20%, to $21.99 in after-hours trading; EMC was also up a bit, gaining 3 cents to $13.62 a share. Capitiva's revenue in the latest reported quarter was $20.2 million. The acquisition is expected to close late this year or early in 2006 following shareholder and regulatory approval. EMC will then take a charge of $15 million to $20 million for the value of Captiva's in-process research and development costs. Excluding the charge, the acquisition is not expected to affect EPS for the first full year of operation, the companies said. San Diego-based Captiva, thought to be an acquisition target earlier this year, sells software used to convert data found on paper documents to usable digital formats. The acquisition appears complementary to EMC's 2003 purchase of Documentum, whose software is used to manage existing digital content. EMC will now offer customers the ability to move massive amounts of paper-based data into files manageable by Documentum's software and store and retrieve it using EMC hardware. Since it entered the software arena with the purchases of Documentum and Legato, EMC's dependence on its core hardware business has lessened considerably. In the third quarter, revenue derived from software application sales and maintenance agreements totaled $470.3 million, or 20% of the company's $2.37 billion of revenue. Revenue from so-called platform software, which is bundled with hardware, is counted separately; it totaled $394.2 million in the quarter. Like Documentum, Capiva is part of an increasingly important niche called document management. Potential business for those companies has grown sharply as the amount of digital data that companies generate and are required to keep grows exponentially.